Jim Cramer's Mad Money In-Depth, 11/12/07: Why Buy Wyeth?

Stocks discussed in the in-depth session of Jim Cramer’s Mad Money TV program, Monday November 12. Click on a stock ticker for more analysis:

Cramer urged viewers to play it safe and not to rely on the Fed, which is not cutting rates fast enough. He would avoid stocks which depend on strong consumer spending, mortgages as well as financial stocks. He added, "In this market you have to protect the money you use to invest," and to keep a 10% cash position.

CEO Interview: Steve Farris, Apache (APA)

While Cramer has called Apache the "king of oils" because of its super growth, it was downgraded by Bernstein, since many analysts believe its multiple expansion is over. However, Cramer says demand is going to remain intense and oil will be a bull market for a long time, and says APA's low price is a buying opportunity, but would exercise caution. "One day does not make a market," said Steve Farris of Monday's decline, "It's too early to write off our growth story." Farris noted this is the 22nd consecutive year of reserve growth, and Cramer suggested buying to stock as it comes down.

Wyeth (WYE), Johnson & Johnson (JNJ)

Cramer discussed Merrill Lynch's downgrade of WYE and Bear Stearns' upgrade, and commented neither report dealt with the main issue, the faltering economy, and how even a weak health stock like JNJ can be up big on a slowdown. Cramer feels the same thing could happen to WYE, which he said he liked for its valuation and vaccines, but felt its Alzheimer's drug is falling behind that of its peers. Concerns over generic drugs, as pointed out by Bear Stearns, are already priced into the stock, according to Cramer. In addition, its increased dividend and buybacks make WYE a buy.

Foster Wheeler (FWLT), Marathon Oil (MRO)

Cramer said although FWLT seems pricey, it is dramatically undervalued. However, he would take profits, since now is the time to sell momentum stocks. He also suggested buying tanker and refining stocks when oil settles down. Cramer is partial to refiners, particularly MRO.

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